Merck KGaA

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Not to be confused with Merck & Co., a company created from American assets of this company seized during WWI.
Merck KGaA
(EMD Millipore in the United States and Canada)
Type Publicly traded KGaA
Traded as FWBMRK
Industry Chemicals, pharmaceuticals
Founded 1668
Founder(s) Friedrich Jacob Merck
Headquarters Darmstadt, Germany
Key people Karl-Ludwig Kley (CEO and Chairman of the executive board), Rolf Krebs (Chairman of the supervisory board)
Products Liquid crystals, life science and performance chemicals, over-the-counter medicines, small molecules and biopharmaceuticals
Revenue 10.276 billion (2011)[1]
Operating income €985.1 million (2011)[1]
Employees 40,676 (end 2011)[1]
Divisions Merck Serono, Merck Consumer Health, Merck Milipore, Merck Performance Materials
Subsidiaries Merck Serono
Website merckgroup.com

Merck KGaA (d.b.a. EMD Millipore in the U.S. and Canada) is a German chemical and pharmaceutical company. Merck, also known as “German Merck” and “Merck Darmstadt”, was founded in Darmstadt, Germany, in 1668, making it the world's oldest operating chemical and pharmaceutical company.[2][3] The company was privately owned until going public in 1995. However, the Merck family still controls a majority (≈70%) of the company's shares.

Following World War I, Merck lost possession of its foreign sites, including the Merck & Co. subsidiary in the United States. Merck & Co., which operates as Merck Sharp and Dohme (MSD) outside the U.S. and Canada, is now an independent company.

Merck KGaA operates mainly in Europe, Africa, Asia, Oceania and Latin America. Since Merck & Co. holds the rights to the Merck name in the U.S. and Canada, the company operated under the umbrella brand EMD Chemicals in North America, and since 2010 as EMD Millipore (after the acquisition of Millipore Corporation),[4][5] formed from the initials of Emanuel Merck, Darmstadt.

History[edit]

The roots of Merck reach back into the 17th Century. In 1668, Friedrich Jacob Merck, an apothecary, assumed ownership of the Engel-Apotheke ("Angel Pharmacy") in Darmstadt, Germany.

In 1816, Emanuel Merck took over the pharmacy. Thanks to his scientific education he was successful in isolating and characterizing alkaloids in the pharmacy laboratory. He began the manufacture of these substances "in bulk" in 1827, touting them as a "Cabinet of Pharmaceutical and Chemical Innovations". He and his successors gradually built up a chemical-pharmaceutical factory that produced — in addition to raw materials for pharmaceutical preparations — a multitude of other chemicals and (from 1890) medicines.[6]

In 1891, Georg(e) Merck established himself in the United States and set up Merck & Co. in New York. Merck & Co. was confiscated following the First World War.[7] and set up as an independent company in the United States. Today, the US company has about 86,000 employees (December 2011) in 120 countries. It is one of the top 5 pharmaceutical companies worldwide, larger than its German ancestor, which employs around 40,700 people in 67 countries (December 2011).

Merck Korea received the "Leading Investor Award" at the 5th Korea-EU Industrial Cooperation Day in 2011.

Merck KGaA's Headquarters in Darmstadt (Germany)
The EMD Chemicals site in San Diego, California

Failed Schering AG bid[edit]

On March 13, 2006, Merck announced a takeover bid for Schering AG, the world's largest producer of oral contraceptives. On March 23, 2006, Bayer AG made a supported offer for Schering and Merck decided to drop out of the bidding for the company.[8] Schering is not to be confused with Schering-Plough which was once part of Schering AG but was acquired by Merck & Co. in 2009

Acquisition of Serono[edit]

In September 2006 the company announced a takeover bid of $13.2 billion for Serono SA, Switzerland's largest biotech firm. The deal included a buy-out of the Bertarelli family's 64.5% stake in Serono to be followed by a public tender offer for the remaining shares starting in November 2006.[9] The combined company has an R&D budget of approximately $1.1 billion and sales of approximately $4.6 billion. Its approximately $2 billion in sales of biologics would make it 7th among pharmaceutical/biotech companies. The new entity, Merck Serono, began operations in 2007.

Acquisition of Millipore[edit]

In 2010 Merck took over Billerica (MA) based Millipore Corporation for EUR 5.3 billion (US$ 7.2 billion).[4][5] It is now a division of Merck's business unit chemicals - Merck Millipore.

EMD Chemicals Gibbstown NJ[edit]

With the acquisition of Millipore, Merck is consolidating its US holdings and shutting down the Gibbstown facility and warehouse. Gibbstown operations will be transferred to the new Philadelphia office and Millipore headquarters.[citation needed]

Acquisition of AZ Electronic Materials SA[edit]

In December 2013, the company bought AZ Electronic Materials SA (AZEM) for about $2.6 billion in cash to increase its offering of specialty chemicals to the electronics industry.[10]

Operations[edit]

Karl-Ludwig Kley, CEO
Aerial image of the headquarter in Darmstadt
Aerial image of the factory in Gernsheim

Pharmaceuticals[edit]

After Wilhelm Adam Sertürner's isolation of morphine from opium in 1805, Merck pioneered (from 1827) the commercial manufacture of morphine for an expanding global market. From 1884 onwards, Merck also played role in the production and marketing of cocaine. Sigmund Freud, author of Über Coca (1884), was an enthusiastic collaborator in Merck's coca research, though the methodological sophistication of his self-experimentation studies has been challenged. Around World War I, Merck systematically patented many drugs including MDMA (ecstasy)[11] and several of its analogues, though no uses for them were given. Attention was directed at vitamins as a new product category, and Vigantol was introduced in 1927, followed by Cebion in 1934.

Following the defeat of Germany in World War II, Merck was granted permission by the military government to produce drugs, pesticides, food preservatives, reagents, and fine chemicals for laboratory use. Soon afterwards the boom commonly known as the "Wirtschaftswunder" (economic miracle) set in. For Merck this meant two-digit sales-growth figures for many years. Products of this time included corticoid preparations — for example Fortecortin, which is still used today — the cold remedy Nasivin or the hormone preparations Gestafortin and Menova.

The focus of Merck's current pharmaceutical R&D is on oncology and cardio-metabolic care. In the former therapeutic area, its first marketed product is Erbitux (cetuximab), for which it has marketing rights worldwide, apart from North America. (Cetuximab was discovered by Imclone Systems, and is marketed in North America by Bristol-Myers Squibb.) Other products from Merck include Metformin, Bisoprolol, Levothyroxine and Digitoxin.

Chemicals[edit]

In the chemicals sector, work started on effect pigments in 1957. An example for these pigments are alumina effect pigments sold under brand name Xirallic®[12] Ten years later the company initiated its involvement in liquid crystals, leading to its market leading role today. Liquid crystals account for the bulk of Merck's profits at present. Currently they're the world leader in producing liquid crystals for Flat-TV's and monitors.[13]

In the area of analytical chemistry, Merck plays a leading role in the development of chromatographic methods and materials.

Merck Millipore[edit]

The Merck Millipore division was created in July 2010 following the completed acquisition of the US company Millipore. This division comprises all Millipore activities and major segments of the former Merck division Performance & Life Science Chemicals. Merck Millipore has three business units: Bioscience, Lab Solutions and Process Solutions. The Bioscience business unit is dedicated to solutions and reagents for protein research and cell biology, cell culture solutions, as well as to products and services for the development of biopharmaceutical agents. The scope of activities of Lab Solutions includes laboratory chemicals and other materials for research, science and industry, products and services for sampling, and test kits for the pharmaceutical, foods and diagnostics industries, along with products, consumables and services surrounding highly purified laboratory water for science and industry. Process Solutions focuses on products and services for the production of chemical and biopharmaceutical agents.

Performance Materials[edit]

Liquid Crystals

Merck is a pioneer in the field of LCD technology and the world’s largest producer of liquid crystals, which are required for the manufacture of LC/TFT displays. The global market share is over 60%. As a result, the company is considered to be a so-called hidden champion. In March 2005 Merck acquired Covion Organic Semiconductors GmbH, a part of the Avecia Group. The company, originally a split-off from the Hoechst AG, and headquartered in the Höchst Industrial Park, produces organic light-emitting materials for OLEDs. Now renamed in Merck OLED Materials GmbH, the company is an essential element in the liquid crystal segment. Merck paid 50 million Euros for the acquisition, which included a research and development unit in the polymer electronics sector, and which is located in Manchester.

On April 2, 2007, Merck announced the liquidation of OLED Materials GmbH, with assets to be transferred to Merck KGaA. 100 employees were integrated into the liquid crystal division. The Liquid Crystals sector also includes materials for photovoltaics and the lighting industry.[14]

Pigments & Cosmetics

This business unit pools all activities for pigments in lacquering, printing and plastic applications, in the field of security technology (for instance counterfeiting protection), pigments for applications in the food and pharmaceutical areas, functional materials, and active substances and pigments for cosmetics.

Price fixing settlement[edit]

Generics UK (Merck's former British subsidiary, the global Generics business being sold on October 2, 2007) paid a £12m out-of-court settlement with the Department of Health over involvement in an alleged price and supply fixing cartel.[15]

The NHS alleges various drugs companies exploited the oligopolistic market conditions, forcing the NHS to pay inflated prices. NHS fraud investigators believe there was a conspiracy to limit the supply of 30 of its most commonly prescribed drugs, including a class of penicillin antibiotics and to a generic version of best-selling ulcer treatment Zantac.[16] The NHS has so far filed claims in relation to just three drugs, seeking damages of more than £150m, while the Serious Fraud Office (SFO) is conducting a parallel investigation into the price-fixing allegations limited to the supply of blood-thinning pill warfarin and penicillin-based antibiotics. Homes and offices of executives at six firms, including Ranbaxy, Generics UK, Norton Healthcare, Goldshield and Regent-GM.were raided by the SFO in May 2002.

References[edit]

  1. ^ a b c "Annual Report 2011". Merck. Retrieved 6 March 2012. 
  2. ^ Das älteste Chemieunternehmen der Welt. In: Manager Magazin 21 September 2006
  3. ^ M. Richter and I. Gomez: Zum Verwechseln gleich. In: Financial Time Deutschland 21 January 2010
  4. ^ a b STOCKS NEWS US-Merck KGaA to buy Millipore for $6 bln
  5. ^ a b Merck KGaA and Millipore Announce Transaction
  6. ^ Merck KGaA (Editor): „Was der Mensch thun kann...“ – Ein Streifzug durch die Geschichte des pharmazeutisch-chemischen Unternehmens Merck. September 2003
  7. ^ Report of the alien property custodian on the chemical industry. In: Ind Eng Chem 11, 1919, p. 364. doi:10.1021/ie50112a030
  8. ^ Schering rät zur Annahme der Bayer-Offerte. In: Manager Magazin Online 19 April 2006
  9. ^ Serono-Übernahme – Mercks Milliardendeal. In: manager magazin 21 September 2006
  10. ^ "Merck KGaA to Buy Chemical Maker AZ for $2.6 Billion". December 6, 2013. 
  11. ^ R. W. Freudenmann et al.: The origin of MDMA (ecstasy) revisited: the true story reconstructed from the original documents. In: Addiction 101, 2006, p. 1241–1245. doi:10.1111/j.1360-0443.2006.01511.x PMID 16911722
  12. ^ http://www.emd-performance-materials.com/en/coatings/coatings_xirallic/coatings_xirallic.html
  13. ^ H. Simon: Hidden Champions des 21. Jahrhunderts: Die Erfolgsstrategien unbekannter Weltmarktführer. Campus, 2007. ISBN 978-3-593-38380-4. p. 20.
  14. ^ W. Huber: Merck KGaA übernimmt OLED- und Polymerelektronik-Aktivitäten von Avecia. Pressemitteilung der Merck KGaA vom 8. Februar 2005
  15. ^ Bowers, Simon (June 30, 2005). "Merck subsidiary pays £12m over price-fixing claims in sales to NHS". The Guardian (London). Retrieved 2007-10-11. 
  16. ^ Lister, Sam (April 6, 2006). "Drug chiefs on price-fixing charges". The Times (London). Retrieved 2007-10-11. 

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